Category: national politics & policies

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national politics & policies too much government

The Un-Super Committee

Surprise, surprise — the so-called Super Committee isn’t very super.

It appears that the august micro-body of solons will fail to come to an agreement to reduce the federal deficit by $1.2 trillion over the next ten years, not in any combination of new revenue or spending “cuts” by today’s effective deadline.

On the bright side, given the nature of the likeliest possible agreement this committee would conceive, its failure sounds like the best possible result.

We’re now over $15 trillion in debt, running a deficit of $1.5 trillion this year alone. Still, the Super Committee couldn’t sop up even 80 percent of the red ink they’re spilling just this year. Not even spread out over the decade.

It gets worse. “I think we need to be honest about it,” Kentucky Senator Rand Paul pointed out yesterday on CNN. “Spending is still rising under any of these plans. We’re only cutting proposed increases in spending.”

“The curve of spending in our country is going up at about 7.5 percent a year,” Sen. Paul went on to explain. “If you were to freeze spending for ten years, no cuts . . . they would call that a $9 trillion cut.”

So, as we face a debt crisis, the Super Committee couldn’t even manage to lessen their planned massive increases in spending.

Or talk straight with the American people.

Why? Perhaps because official Washington knows that spending is the real source of their power.

This is Common Sense. I’m Paul Jacob.

Categories
free trade & free markets insider corruption national politics & policies too much government

Self-Interest Wins Every Time

Incentives work. Because people are self-interested.

Even the seemingly altruistic protagonist played by Kevin Costner in the movie Field of Dreams exclaims, “I haven’t once asked what’s in it for me,” only to then ask, “What’s in it for me?”

That line comes to mind when I hear politicians and business folks talk about private-public partnerships, from subsidies for ethanol to billions in government loans to supposedly spur “green” technology.

The bankruptcy of the solar panel maker Solyndra cost taxpayers more than half a billion dollars. But it’s not merely that government is less than stellar at picking investment winners; it’s that the interests of politicians and businesspeople aren’t “the public interest.”

Never will be.

Sure, Energy Secretary Steven Chu told Congress yesterday, “I did not make any decision based on political considerations.” But internal company emails feature complaints about pressure from the Obama Administration to delay announcing layoffs until after the 2010 elections.

Whose interest did that serve?

Documents also uncover Solyndra executives hiding bad news the better to win additional federal funds and, alternatively, threatening that the company was about to go under hoping the potential bad press for Obama might shake down additional bucks.

Companies have an interest in the big money the federal government dangles before them. Politicians have an interest in appearing to be economic wizards creating jobs and spurring a new world with bright green hues.

Neither incentive promotes sound business behavior nor equates with the public interest.

This is Common Sense. I’m Paul Jacob.

Categories
free trade & free markets national politics & policies too much government

Clunker Flunked

When the Obama Administration hit the ground running in 2009, one of its first “hopeful” and “audacious” programs was “Cash for Clunkers,” a sort of triple-action economic stimulus, carbon-emission reduction, and automaker bailout bill. Congress got on board, a lot of trades were made, billions spent. There was much brouhaha.

Skepticism should have been the order of the day, of course. So many things could have gone wrong.

And did.

Now, with the clarity of 20-20 hindsight, a consensus emerges: Cash for Clunkers was a clunker itself. An economic analysis from Resources for the Future is just the latest (mostly negative) judgment: “[T]he program increased new vehicle sales by about 0.36 million during July and August of 2009, implying that approximately 45 percent of the spending went to consumers who would have purchased a new vehicle anyway. Our results suggest no gain in sales beyond 2009 and hence no meaningful stimulus to the economy.”

Further, fuel economy gains and pollution reductions were minuscule.

The study is far from exhaustive. A lot of old cars were scrapped, recycled. Guess what this does to the used car and parts market? It’s been devastating.

Who’s hurt by supply reductions and consequent price rises? Cash-strapped folks, the kind of people who usually buy used cars, or keep old cars running — which is a lot of people during a depression.

I bet that Cash for Clunkers served, on net, to transfer wealth from the working poor to far wealthier individuals.

This is Common Sense. I’m Paul Jacob.

Categories
free trade & free markets national politics & policies too much government

Nails & Ball-Peen Hammers

When all you have is a hammer, every problem looks like a nail. When it comes to “jobs,” our politicians prove the truth of this adage over and over. They think that they have to “do something,” or at least “look busy” providing “leadership.”

Wrong — unless they take the lead to get out of the way.

Alas, few have the courage for that kind of leadership.

Republican politicians — fearing “looking bad” — are, even now, floating various “plans” to create “jobs.”

“I thought it was incumbent on me to at least say . . . ‘We’re working on a plan,’” says one incumbent.

Trouble is, whatever plan he or his colleagues put up to counter the president’s absurdities, odds are that it, too, will not work.

Why?

The trouble with markets right now is uncertainty. Several sectors went bust, and it’s not easy to get progress started again . . . especially when the government keeps cooking up game-changers. Solutions. “Fixes.” Political machinations — subsidies or regulations or any of the usual tools in the politicians’ tool belt — just increase uncertainty, muddying up the recovery.

The neat thing about markets is that none of us need to know how, exactly, to order the “economy” for order to be discovered. It works out. This is old wisdom, but even actual experimentation has shown that this is the case.

The economy is not a mess of boards half-nailed down. The last thing it needs is more hammering from politicians.

This is Common Sense. I’m Paul Jacob.

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education and schooling national politics & policies

Can Senators Learn?

An 868-page bill said to be a fix for the loathed, landmark “No Child Left Behind,” was recently introduced allowing senators only 48 hours to read and consider it. Sen. Rand Paul (R-Ky) objected, declaring, “This process is rotten from the top to the bottom.”

Sen. Paul called that a “tragedy.”

No senator could argue with his criticism of the process, of course, but Sen. Michael Bennett of Colorado did take to the floor to argue it was an even bigger tragedy that so many children failed to reach proficiency in math and reading. He begged Sen. Paul to stop objecting so the bill could move forward and be passed.

Sound reasonable? Well, Bennett did not claim to have read the entire bill, only that (like so many other bills passed in recent years) the legislation is so desperately needed that no time  could be spared to actually read it and deliberate.

Sen. Paul also lambasted the idea that senators had not held hearings where they might listen to the teachers and administrators struggling to comply with the federal mandates in No Child Left Behind. “I’ve yet to meet one teacher who’s in favor of No Child Left Behind,” he offered. “They abhor it.”

For his efforts, Paul got a hearing on the legislation, scheduled for November 8. Now let’s hope he can get senators to sit up in their seats and pay attention.

This is Common Sense. I’m Paul Jacob.

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free trade & free markets national politics & policies

Depression Low Notes

Though President Obama has a reputation amongst conservatives for being “soft” on illegal immigration, he has, in fact, presided over an administration that has sent record numbers of folks back to their countries of origin.

And this has hit the agricultural sector. Hard. The one fifth of Americans who are unemployed have, apparently, little interest in picking crops. Perhaps Tom Lehrer’s 1965 song about Sen. George Murphy explains the popular rationale most memorably:

Should Americans pick crops?
George says, “No,
“’Cause no one but a Mexican
“Would stoop so low.
“After all, even in Egypt, the Pharaohs
“Had to import Hebrew braceros.”

Apparently, native workers aren’t exactly desperate. Credit this to extended unemployment benefits?

Doug French, of the Mises Institute, notes that as supplies of produce come up short, food prices have risen. Without recent immigrants to pick crops, some farms have had to contract with prisons.

Things sure have changed since the days of the Great Depression. Back then, those looking for work took all sorts of jobs: menial labor, farm work, you-name-it.

Today? Apparently not.

Trust me, I don’t blame folks for avoiding back-breaking labor. About 30 years ago, I chopped tobacco. Soaking my sore muscles in the tub after the first day, I decided that surely I could find other work — and I did.

Still, someone has to pick the crops. Food prices are soaring. American citizens might rather be deported than have to labor in the fields.

Where on Earth would we find laborers who would feel differently?

This is Common Sense. I’m Paul Jacob.

Categories
free trade & free markets national politics & policies property rights too much government

Renegade Regulatory Agencies

Americans often express astonishment when they learn that many of the nation’s laws — the bulk of its “regulations” — have not been written by Congress. Though the Constitution grants to Congress alone the power to legislate, Congress cedes most of that power to Executive Branch bureaucracies.

Last Wednesday, Sen. Rand Paul hosted a panel on government regulatory abuse. Covering this “round table” discussion, Lou Dobbs, the Fox anchorman, interviewed Sen. Paul, and the two highlighted a number of regulatory horror stories:

  • A man from Hungary was put in jail for three years for cleaning up an illegal dump that had been put onto land that he had purchased.
  • A family was harassed for raising rabbits without a license — fined $3,000,000 but given the out of a mere $90,000 fine if they paid within 30 days by credit card.
  • Members of another family found themselves face to face with EPA bureaucrats, who halted their housing project, demanded costly site restoration, and charged them with criminal liability for not immediately complying.

The law that’s directed against this latter family, by the way, “is about wetlands,” which, Rand Paul informs us, Congress has never enacted laws about: “‘Wetlands’ is something defined into existence by regulatory agencies.”

In The Road to Serfdom F. A. Hayek showed how undemocratic and abusive “central planning” becomes. Apparently, even without a grand, overarching plan, regulation of the micro-managing kind navigates the same path.

Demand more “regulation”? Expect arbitrary judgment and unreasonable requirements — tyranny — as the result.

This is Common Sense. I’m Paul Jacob.

Categories
initiative, referendum, and recall national politics & policies too much government

The Obama Betrayals

In one way, President Obama has had it hard: He inherited a mess.

In another, he has had it easy: His predecessor blew it big time.

As James Bovard put it in his 2004 book, The Bush Betrayal, “George W. Bush came to the presidency promising prosperity, peace, and humility. Instead, Bush . . . spawned record federal budget deficits, launched an unnecessary war, and made America the most hated nation in the world.”

The election of Obama turned foreign opinion around, but his actual policies have proved no advance over his predecessor’s.

Bush started the bailouts; Obama bailed out more.

Bush pushed through an under-funded entitlement, Medicare Part D. Obama leveraged his political capital to take an even bigger step towards socialized medicine.

Bush understandably undertook the Afghanistan venture — but the Iraq conquest and reconstruction betrayed his promise to forswear “nation-building.” Then Obama lingered in Iraq, upped the forces in Afghanistan — long after the rationale became murky — and also attacked a number of other countries, including Libya. So much for the winner of the Nobel Peace Prize.

But when it comes to America’s misguided War on Drugs, Obama has been especially disappointing. No-one really expected much of Bush. But Obama? He said he’d reverse policy at least vis-à-vis the states that voted in medical marijuana. Yet federal agents continue targeting medical marijuana growers.

We aren’t being served well by the presidents we spend so much time thinking about.

Could it be because they don’t really think much about us?

This is Common Sense. I’m Paul Jacob.

Categories
free trade & free markets national politics & policies too much government

The End of an Era?

More than one person forecast the bursting of the Dot Com Bubble, twelve years ago. The Pets.com sock puppet wasn’t the only clue — the general enthusiasm for companies that had never, ever shown a profit proved signal enough. And then there was all the talk about how the stock market “could only go up.”

Soon after, it went down.

Then stocks rose again, in a Fed-induced bubble. And then collapsed again, along with the financial system.

Brace yourself for another rerun.

The Economist informs us that “European bankers have been saying things are fine for weeks now, even as their exposure to indebted euro-zone countries strangles their access to funding. . . . Fears of contagion from Europe have now infected America.”

The gloom and doom just rises from there.

The article is depressing for another reason, though — the assumption that governments must not let banks fail, making The Economist read like council for never-ending tax-funded bailouts. Which was the kind of thing actual economists used to warn governments against. (A long time ago . . . perhaps back when the science was called “political economy.”)

Times sure have changed, as The Economist admits. The three years since 2008 have made a difference: Now it is the governments that prove insolvent.

It’s time for The Economist to rethink its policy advice, time to call for a general overhaul of the international monetary system.

We must end the age of inflation-and-bailouts, before it ends us.

This is Common Sense. I’m Paul Jacob.

Categories
free trade & free markets national politics & policies too much government

Obscene Green

I don’t know about you, but when I want to invest my money, I don’t go the Department of Energy for advice.

There’s a reason for this. At their best, bureaucracies “lumber on,” to quote one sociologist’s analysis. They are, “by their nature . . . fitted only for average requirements.” Picking long shots? Not their strong suit.

And a long shot is what the government’s investment in Solyndra surely was. The more emails that are released, the more obvious this becomes. Even savvy folks within the administration knew was that Solyndra was a bad deal.

Yet President Obama says it seemed like a “good bet” at the time.

Why?

Politics. He needed to look good, and the easiest garb to grab was the garb of “green.”

That is, alternative energy — which is said to be our future. Undoubtedly some alternatives will dominate . . . that is, ones found on the market. The great gales of destructive creation that is the market process will eventually solve our “energy problem” . . . if only to create a new problem, requiring yet another solution. (In real life, there are rarely “solutions,” only trade-offs.)

There is something obscene in Obama’s “good bet,” for he was betting with other people’s money. Confiscated money.

At the very least, such funds must be treated carefully, not gambled.

To spend otherwise is to sully, for temporary gain, a sacred trust.

Of course, Americans are so used to such trust being desecrated that, sadly, the Solyndra scandal doesn’t quite seem like the enormity it truly is.

This is Common Sense. I’m Paul Jacob.